Judge denies request to suspend Uptown development activity

A state district judge denied a request Thursday to temporarily block the Uptown Development Authority from spending money and issuing additional bonds ahead of a full hearing on a lawsuit over the authority's constitutionality.

Restaurateur Russell Masraff and condominium resident Jim Scarborough alleged in a lawsuit filed Wednesday that Uptown and the tax increment reinvestment zone that feeds it were created in violation of the Texas Constitution, arguing that the west Houston neighborhood did not qualify as "blighted, undeveloped or underdeveloped" when the city formed the economic development zone in 1999.

"This TIRZ was established in order to create a pot of money to revitalize infrastructure in an area that was not only not blighted, but was an economic generator," plaintiffs' attorney Joe Larsen said, asking District Judge Dan Hinde to suspend Uptown's future payments and ability to issue another $65 million in debt.

City Council delayed a vote Wednesday on authorizing Uptown's bond issuance, which would support widening Post Oak Boulevard and adding dedicated bus lanes, as well as improving Memorial Park.

Assistant City Attorney Lucy Anderson said the plaintiff's constitutional challenge was not "sufficiently articulated" and added that other questions about the legality of Uptown's creation would have needed to be raised within the required three-year window for challenging city ordinances.

Anderson also cited the potential for disruption if a temporary restraining order were to be authorized.

"We're just paying for an obligation that we've already undertaken. Construction is already underway," she said.

Kelly Sandill, an attorney representing Uptown, pegged the cost of delaying bond issuance and halting and resuming Uptown's work at roughly $1.5 million.

She also emphasized that economic development zones may be created in undeveloped or underdeveloped areas, not just blighted ones.

The city argued in forming the Uptown TIRZ that the area "substantially impairs and arrests the sound growth of the City" because it lacked adequate streets and sidewalks.

"I think the plaintiffs like to focus on the blighted concept because it sounds more dramatic," Sandill said.

A subsequent hearing in the case has yet to be scheduled, Harris County District Clerk records show.

Rebecca Elliott covers City Hall for the Houston Chronicle, having previously written about local politics, namely the 2015 Houston mayor’s race. She joined the Chronicle in 2014 as a crime and general assignment reporter in Fort Bend County. A New York City native, she also has reported on politics for Reuters, POLITICO and BuzzFeed.